Sierra Club Challenges RUS Lien Accommodation Regulation

The Sierra Club has broadened its campaign against approvals granted by the Rural Utilities Service (RUS) related to new coal plants involving electric cooperatives. Having previously challenged specific RUS approvals, the Sierra Club recently filed suit challenging the overall validity of the RUS regulation on which such approvals are based. Approvals, including lien accommodations, granted by RUS pursuant to loan agreements are excluded from environmental review under this regulation. This facial challenge to RUS’s regulation has implications for all RUS borrowers.

As previously reported, the Sierra Club is engaged in an aggressive campaign to stop the construction of new coal plants. In a lawsuit filed more than two years ago, the Sierra Club challenged specific RUS approvals related to Sunflower Electric Power Corporation’s expansion of its coal-fired Holcomb plant in Kansas. The Sierra Club alleged that such approvals were invalid because they were granted in the absence of any environmental review under the National Environmental Policy Act (NEPA). Even though the expansion will be financed with private funds, the Sierra Club sued to rescind the approvals. Sierra Club v. USDA, Docket No. 1:07-cv-01860-EGS (D.D.C. filed Oct. 16, 2007).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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